It’s a provocative question, to be sure, particularly if you’re a seller. What do we mean by savvy, anyway? And why ask such a provocative question? There’s a method to our madness. All things being equal, there is no difference between buyers and sellers. With the same information at their fingertips and with the same shared experience of this market, they are on the same page. There’s only one problem with that: all things are not equal.
They do not have the same information nor do they share the same experience of this market. How can this be?
Let’s break it down a bit, starting with buyers. Your average buyer nowadays is in the market for about a year before finding, “winning” and pulling the trigger on a property. On average, they will have seen 20-30 apartments a month (i.e. at least 100 apartments over the course of the year) … within a certain price range and certain distinct characteristics. (I.e. If a buyer is looking for a 2 bedroom between $1.8 and $2.3 million in a doorman building, they will be seeing 100 apartments meeting that criteria.) Chances are, over the course of that year, they will have regretfully waited too long to place offers on at least 5 apartments, encountered at least 10 bidding wars, actually lost at least 2 and perhaps even had a deal fail after signing the contract. That is a full and robust experience of the market by any standard. It is easy to see from thinking through their experience that buyers have a deep and rather efficient view of the current market, with so much data feeding into that view. After only a month of searching, buyers develop a keen sense of what’s overpriced or a good deal, because they’re actively seeing the comps. Moreover, they develop a keen understanding of how quickly good property moves, and therefore become skeptical of properties on the market for longer than the average.
Now let’s turn to sellers. Your average seller nowadays is in the market for two months. On average, they have seen one and only one apartment: their own. They have a natural attachment to it because it’s theirs and they believe it’s special. (All very normal psychological underpinnings, by the way.) Their experience of the market is remarkably myopic, by their very role as sellers, as compared to those of buyers and therefore have a far less developed understanding of the existing, on-the-ground market dynamics within which they’re competing. In almost every way (except for holding a product that others hopefully want to buy) they’re at a structural disadvantage.
And this is where the broker kicks in. The only way for sellers to effectively “compete” and make as informed a decision as buyers is to leverage their broker as much as possible. The broker has far more on-the-ground experience than even the buyers, both anecdotally and objectively. (S)he deals with 20-30 active buyers at any point in time and has a strong sense of what does and doesn’t work in this market … in real time. There is a level of trust that needs to exist and a willingness to learn that should be present in order to make the best decisions and optimize the sale. This holds true for decisions around marketing, staging, open house frequency and, most importantly, pricing.
Therefore, if you’re a seller, recognize you’re not on an even playing field on your own – but with a trusted broker partner, you’re well on your way to making the most of this market!